11–15. . Because “every reasonable construction must be resorted to, in order to save a statute from unconstitutionality,” Hooper v. California, 155 U. S. 648, 657, the question is whether it is “fairly possible” to inter pret the mandate as imposing such a tax, Crowell v. Benson, 285 U. S. 22, 62. The question posed by the 2010 Medicaid expansion, then, is essentially this: To cover a notably larger population, must Congress take the repeal/reenact route, or may it achieve the same result by amending existing law? is the lack of historical precedent for Congress’s action” (internal quotation marks omitted)). Congress well understood that refusal was not a practical option. Such a massive undertaking would hardly be “ritualistic.” Ibid. The Court found it “[e]nough for present purposes that wherever the line may be, this statute is within it.” Ibid. Congress, aiming to assist the needy, has appropriated federal money to subsidize state health-insurance programs that meet federal standards. (requiring that certain beneficiaries of TANF funds be “eligible for medical assistance under the State[’s Medicaid] plan”). If the individual mandate is targeted at a class, it is a class whose commercial inactivity rather than activity is its defining feature. It is not hard to show the difficulty courts (and Congress) would encounter in distinguishing statutes that reg- ulate “activity” from those that regulate “inactivity.” As Judge Easterbrook noted, “it is possible to restate most actions as corresponding inactions with the same effect.” Archie v. Racine, 847 F. 2d 1211, 1213 (CA7 1988) (en banc). That is fair and constitutional enough when the States freely agree to have their powers employed and their employees enlisted in the federal scheme. Responsibility will be shared, as burdens and benefits balance each other. Ante, at 25. The starting premise on which The Chief Justice’s coercion analysis rests is that the ACA did not really “extend” Medicaid; instead, Congress created an entirely new program to co-exist with the old. Tr. state governments.”).17. Guaranteed eligibility varies by category: for some it is tied to the federal poverty level (incomes up to 100% or 133%); for others it depends on criteria such as eligibility for designated state or federal assistance programs. NATIONAL FEDERATION OF INDEPENDENT BUSINESS, et al., PETITIONERS. In 2014, federal funds will cover 100% of the costs for newly eligible beneficiaries; that rate will gradually decrease before settling at 90% in 2020. Legal Services Corporation v. Velazquez, 531 U. S. 533, 561 (2001) (Scalia, J., dissenting). 44–45 (Mar. The text of a statute can sometimes have more than one possible meaning. For the joint dissenters, however, all that matters, it appears, is whether States can resist the temptation of a given federal grant. See Dietary Guidelines, supra, at 19 (“Improved nutrition, appropriate eating behaviors, and increased physical activity have tre-mendous potential to . These federal dollars total nearly two thirds—64.6%—of all Medicaid expenditures nationwide.15 Id., at 46. 11–398 (Anti-Injunction Act), but is a tax for constitutional purposes, see Petitioners’ Minimum Coverage Brief 52–62. The result would be an unintended boon to insurance companies, an unintended harm to the federal fisc, and a corresponding breakdown of the “shared responsibil- ity” between the industry and the federal budget that Congress intended. The Framers knew the difference between doing something and doing nothing. NATIONAL FEDERATION OF INDEPENDENT BUSINESS et al. Virtually everyone, I reiterate, consumes health care at some point in his or her life. 2  We appointed H. Bartow Farr III to brief and argue in support of the Eleventh Circuit’s judgment with respect to severability, and Robert A. But if they did, the Federal Government paid at least half the costs. The power to regulate commerce presupposes the existence of commercial activity to be regulated. 18, vests Congress with authority to enact provisions “incidental to the [enumerated] power, and conducive to its beneficial exercise,” McCulloch, 4 Wheat., at 418. IV). At what point does an extension become so large that it “transforms” the basic law? At their option, States could enroll additional “medically needy” individuals; these costs, too, were partially borne by the Federal Government at the same, at least 50%, rate. Likewise, knowing that States would not necessarily provide affordable health insurance for aliens lawfully present in the United States—because Medicaid does not require States to provide such coverage—Con- gress extended the availability of the new federal insurance subsidies to all aliens. L. J. of Health and Human Services, Centers for Medicare and Medicaid Services, Historic National Health  Expenditure Data, National Health Expenditures: Se- lected Calendar Years 1960–2010 (Table 1). ); Steward Machine, supra, at 593. But the prior change she dis-cusses—presumably the most dramatic alteration she could find—does not come close to working the transformation the expansion accomplishes. Given that holding, I entirely agree with The Chief Justice as to the appropriate remedy. When future Spending Clause challenges arrive, as they likely will in the wake of today’s decision, how will litigants and judges assess whether “a State has a legitimate choice whether to accept the federal conditions in exchange for federal funds”? But see ante, at 53–55. Under that theory, Congress may order individuals to buy health insurance because the failure to do so affects interstate commerce, and could un-dercut the Affordable Care Act’s other reforms. The question in this case, however, is whether the complex structures and provisions of the Patient Protection and Affordable Care Act (Affordable Care Act or ACA) go be- yond those powers. v. Alton R. Co., 295 U. S. 330, 362 (1935). 42 U. S. C. §1396d(y) (2006 ed., Supp. If all inactivity affecting commerce is commerce, commerce is everything. I, §8, cl. Rather, it makes going without insurance just another thing the Government taxes, like buying gasoline or earning income. Consistent with the Framers’ intent, we have repeatedly emphasized that Congress’ authority under the Commerce Clause is dependent upon “practical” considerations, including “actual experience.” Jones & Laughlin Steel Corp., 301 U. S., at 41–42; see Wickard v. Filburn, 317 U. S. 111, 122 (1942); United States v. Lopez, 514 U. S. 549, 573 (1995) (Kennedy, J., concurring) (emphasizing “the Court’s definitive commitment to the practical conception of the commerce power”). 11-393 NATIONAL FEDERATION OF INDEPENDENT BUSINESS V. SEBELIUS DECISION BELOW: 648 F.3d 1235 CONSOLIDATED WITH 11-400 FOR A TOTAL OF 90 MINUTES ORAL ARGUMENT. (same). The Court regards its strained statutory interpretation as judicial modesty. I, §8, cl. The joint dissenters  express a similar apprehension. Nor is it accurate to say that the minimum coverage provision “compel[s] individuals . And because the threat to withhold a large amount of funds from one program “leaves the States with no real option but to acquiesce [in a newly created program],” The Chief Justice concludes, the Medicaid expansion is unconstitutionally coercive. The States therefore had no law-based ground on which to complain about the amendment, despite the significant character of the change. . 68 (Mar. Id., at 933–935. will owe a monetary penalty, in addition to the income tax itself,” and that “[t]he [Internal Revenue Service (IRS)] will assess and collect the penalty in the same manner as assessable penalties under the Internal  Revenue Code.” Petitioners’ Minimum Coverage Brief 53. So it does. In 2010, on average, an individual in the United States incurred over $7,000 in health-care expenses. In Gibbons v. Ogden, 9 Wheat. Thereafter, Congress could have enacted Medicaid II, a new program combin- ing the pre-2010 coverage with the expanded coverage required by the ACA. As its name suggests, the condemnation power does not “compel” anyone to do anything. Thus, what the Government’s caption should have read was “alternatively, the minimum coverage provision is not a mandate-with-penalty but a tax.” It is important to bear this in mind in evaluating the tax argument of the Government and of those who support it: The issue is not whether Congress   had the power to frame the minimum-coverage provision as a tax, but whether it did so. . The Act provides that the penalty will be paid to the Internal Revenue Service with an individual’s taxes, and “shall be assessed and collected in the same manner”  as tax penalties, such as the penalty for claiming too large an income tax refund. National Federation of Independent Business v. Sebelius was a United States Supreme Court case regarding the individual mandate and Medicaid expansion provisions of the Affordable Care Act (ACA). 11–398, p. 4 (“[O]ut-of-state residents continue to seek and receive millions of dollars in uncompensated care in Massachusetts hospitals, limiting the State’s efforts to improve its health care system through the elimination of uncompensated care.”). 1962). We have similarly held that exactions not labeled taxes nonetheless were authorized by Congress’s power to tax. An individual who disobeys may be subjected to criminal sanctions. Pp. But Congress has never attempted to rely on that power to compel individuals not engaged in commerce to purchase an unwanted product.3 Legislative novelty is not nec-essarily fatal; there is a first time for everything. 11–398, p. 28 (hereinafter Maryland Brief) (“No insurance regime can survive if people can opt out when the risk insured against is only a risk, but opt in when the risk materializes.”). The aggregated decisions of some consumers not to purchase wheat have a substantial effect on the price of wheat, just as decisions not to purchase health insurance have on the price of insurance. The dissent protests that the Necessary and Proper Clause has been held to include “the power to enact criminal laws, . For instance, those who did not purchase insurance could be subjected to a surcharge when they do enter the health insurance system. Amicus argues that even though Congress did not label the shared responsibility payment a tax, we should treat it as such under the Anti-Injunction Act because it functions like a tax. According to Medicaid.gov, in Fiscal Year 2010, the Federal Government made Medicaid payments in the amount of nearly $260 billion, repre- senting 67.79% of total Medicaid payments of $383 billion. The legitimacy of Spending Clause legislation, however, depends on whether a State voluntarily and knowingly accepts the terms of such programs. Thus, the federal subsidies must be invalidated. of Commerce, Bureau of Census, Statistical Abstract of the United States: 2001, p. 262 (Table 419, Federal Grants-in-Aid Summary: 1970 to 2001). “[W]here we find that the legislators . As a result, federal lawmakers observed, Massachusetts succeeded where other States had failed. United States v. Morrison, 529 U. S. 598, 607 (2000). It prohibits only the “application” of the Secretary’s authority to withhold Medicaid funds from States that decline to conform their Medicaid plans to the ACA’s requirements. National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012), was a landmark United States Supreme Court decision in which the Court upheld Congress' power to enact most provisions of the Patient Protection and Affordable Care Act (ACA), commonly called Obamacare, and the Health Care and Education Reconciliation Act (HCERA), including a requirement for most … The question remains whether today’s holding affects other provisions of the Affordable Care Act. . . I, §8, cl. Suppose, for example, that Congress enacted legislation offering each State a grant equal to the State’s entire annual expenditures for primary and secondary education. Section 5000A(g)(1)’s command that the penalty be “assessed and collected in the same manner” as taxes is best read as referring to those chapters and giving the Secretary the same authority and guidance with respect to the penalty. Such provisions validate the Senate Majority Leader’s statement, “ ‘I don’t know if there is a senator that doesn’t have something in this bill that was important to them. In answering that constitutional question, this Court follows a functional approach, “[d]isregarding the designation of the exaction, and viewing its substance and application.” United States v. Constantine, 296 U. S. 287, 294. 1. Section 5000A is  therefore constitutional, because it can reasonably be read as a tax. . . Because “all South Dakota would lose if she adhere[d] to her chosen course as to a suitable minimum drinking age [was] 5% of the funds otherwise obtainable under specified high- way grant programs,” we found that “Congress ha[d] of- fered relatively mild encouragement to the States to enact higher minimum drinking ages than they would otherwise choose.” Ibid. 10, No. 954, extends Medicare coverage to individuals exposed to asbestos from a mine in Libby, Montana. Ibid. Scalia, Kennedy, Thomas, and Alito, JJ., filed a dissenting opinion. And the court rejected the States’ claim that the threatened loss of all federal Medicaid funding violates the Tenth Amendment by coercing them into complying with the Medicaid expansion. It is not the proper role of the Court, by severing part of a statute and allowing the rest to stand, to impose unknowable risks that Congress could neither measure nor predict. See also Letter from George Washington to James Madison (Nov. 30, 1785), in 8 id., at 428, 429 (“We are either a United people, or we are not. It is one of the canons of interpretation that a statute that penalizes an act makes it unlawful: “[W]here the statute inflicts a penalty for doing an act, although the act itself is not expressly prohibited, yet to do the act is unlawful, because it cannot be supposed that the Legislature intended that a penalty should be inflicted for a lawful act.” Powhatan Steamboat Co. v. Appomattox R. Co., 24 How. See supra, at 6–7. And if a substantial number of States were entirely expelled from the program, the number of persons without coverage would be even higher. Coercing States to accept conditions risks the destruction of the “unique role of the States in our system.”  Davis, supra, at 685 (Kennedy, J., dissenting). The “question of the constitutionality of action taken by Congress does not depend on recitals of the power which it undertakes to exercise.” Woods v. Cloyd W. Miller Co., 333 U. S.  138, 144 (1948). 45–58. “[Federal] laws conscripting state officers,” the Court reasoned, “violate state sovereignty and are thus not in accord with the Constitution.” Printz, 521 U. S., at 925, 935; New York, 505 U. S., at 176. 271 (Uniform Militia Act of 1792); to turn gold currency over to the Federal Government in exchange for paper currency, see Nortz v. United States, 294 U. S. 317, 328 (1935); and to file a tax return, 26 U. S. C. §6012 (2006 ed., Supp. The power over activities that substantially  affect interstate commerce can be expansive. (emphasis added). See supra, Part II. Even commentators sympathetic to robust enforcement of Dole’s limitations, see supra, at 46, have concluded that conceptions of “impermissible coercion” premised on States’ perceived inability to decline federal funds “are just too amorphous to be judicially administrable.” Baker & Berman, Getting off the Dole, 78 Ind. Instead, the Clause is “ ‘merely a declaration, for the removal of all uncertainty, that the means of carrying into execution those [powers] otherwise granted are included in the grant.’ ” Kinsella v. United States ex rel. Section 2001 of the ACA would add approximately three pages.19. See id., at 685. The con-ditions imposed by Congress ensure that the funds are used by the States to “provide for the . of Public Hospitals, 2009 Annual Survey: Safety Net Hospitals and Health Systems Fulfill Mission in Uncertain Times 5–6 (Feb. 2011). We have already explained that the shared responsibility payment’s practical characteristics pass muster as a tax under our narrowest interpretations of the taxing power. Three considerations allay this concern. 780 F. Supp. That is, an insurer may not deny coverage on the basis of, among other things, any pre-existing medical condition that the applicant may have, and the resulting insurance must cover that condition. 1. Third, this “tax” was enforced in part by the Department of Labor, an agency responsible for pun-ishing violations of labor laws, not collecting revenue. Click here to contact our editorial staff, and click here to report an error. [c]hanges in Federal law, regulations, policy  interpretations, or court decisions.”). Today’s decision should have vindicated, should have taught, this truth; instead, our judgment today has disregarded it. “We have repeatedly characterized . Without the Individual Mandate and Medicaid Expansion, the Affordable Care Act’s insurance regulations and insurance taxes impose risks on insurance companies and their customers that this Court cannot measure. . 7  “State expenditures” is used here to mean annual expenditures from the States’ own funding sources, and it excludes federal grants unless otherwise noted. spare neither sex nor age, nor high nor low, nor sacred nor profane.” The Federalist No. 557, 564 (1871)). That is what makes this such a simple case, and the Court’s decision so unsettling. 1, p. 9 (1965). Those who have insurance bear the cost of this guarantee. The joint dissenters point to smaller programs States might have the will to refuse. Id., at 15–22. As these decisions show, Pennhurst’s rule demands that conditions on federal funds be unambiguously clear at the time a State receives and uses the money—not at the time, perhaps years earlier, when Congress passed the law establishing the program. See ACA §§2001(a)(1), (3), 124 Stat. NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. of Oral Arg. The ACA, in contrast, relates solely to the federally funded Medicaid program; if States choose not to comply, Congress has not threatened to withhold funds earmarked for any other program. This gets things backwards: Congress, not the States, is tasked with spending federal money in service of the general welfare. See Social Security Amendments of 1965, §121(a), 79 Stat. v. Benson, 285 . For ex ample, the Act requires state programs to provide Medicaid coverage by 2014 to adults with incomes up to 133 percent of the federal poverty level, whereas many States now cover adults with children only if their income is considerably lower, and do not cover childless adults at all. Nor does our case law toe the activity versus inactiv- ity line. Start studying National Federal Independent Business (NFIB) v Sebelius. Id., at 17–18. Under the current health-care system, healthy persons who lack insurance receive a benefit for which they do not pay: They are assured that, if they need it, emergency medical care will be available, although they cannot afford it. But we have done so. But those differences do not show that the failure to enter the health-insurance market, unlike the failure to buy cars and broccoli, is an activity that Congress can “regulate.” (Of course one day the failure of some of the public to purchase Amer- ican cars may endanger the existence of domestic automobile manufacturers; or the failure of some to eat broccoli may be found to deprive them of a newly discovered cancer- fighting chemical which only that food contains, producing health-care costs that are a burden on the rest of us—in which case, under the theory of Justice Ginsburg’s dissent, moving against those inactivities will also come within the Federal Government’s unenumerated problem-solving powers.). U. S. 42 U. S. C. §1304. . See ante, at 22–23. as Amici Curiae in No. . When we invalidate an application of a statute because that application is unconstitutional, we are not “rewriting” the statute; we are merely enforcing the Constitution. Each one of our cases, including those cited by Justice Ginsburg, post, at 20–21, involved preexisting economic activity. As evidenced by Medicare, Medicaid, the Employee Retirement Income Security Act of 1974 (ERISA), and the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Federal Govern ment plays a lead role in the health-care sector, both as a direct payer and as a regulator. The Court also sought to distinguish activities having a “direct” effect on interstate commerce, and for that reason, subject to federal regulation, from those having only an “indirect” effect, and therefore not amenable to federal control. . . 28, 2012). A State therefore has no claim on the money its residents pay in federal taxes, and federal “spending programs need not help people in all states in the same measure.” See Brief for David Satcher et al. The Government’s first argument is that the individual mandate is a valid exercise of Congress’s power under the Commerce Clause and the Necessary and Proper Clause. Moreover, States have no entitlement to receive any Medicaid funds; they enjoy only the opportunity to accept funds on Congress’ terms. The individual mandate, by contrast, vests Congress with the extraordinary ability to create the necessary predicate to the exercise of an enumerated power and draw within its regulatory scope those who would otherwise be outside of it. See Institute of Medicine, National Academies, Insuring America’s Health: Principles and Recommendations 43 (2004). We have long read this provision to give Congress great latitude in exercising its powers: “Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are  constitutional.” McCulloch, 4 Wheat., at 421. 9  See Office of Management and Budget, Historical Tables, Budget of the U. S. Government, Fiscal Year 2013, Table 12.1—Summary Comparison of Total Outlays for Grants to State and Local Governments: 1940–2017 (hereinafter Table 12.1), http://www.whitehouse.gov/omb/ budget/Historicals; id., Table 15.2—Total Government Expenditures: 1948–2011 (hereinafter Table 15.2). See 26 U. S. C. §5000A(a). Spending Clause programs do not pose this danger when a State has a legitimate choice whether to accept the federal conditions in exchange for federal funds. Virtually every person residing in the United States, sooner or later, will visit a doctor or other health-care professional. Second, according to The Chief Justice, “Congress mandated that newly eligible persons receive a level of coverage that is less comprehensive than the traditional Medicaid benefit package.” Ibid. It is true that, at the end of the day, it is inevitable that each American will affect commerce and become a part of it, even if not by choice. Penalties for absolute-liability offenses are commonplace. See 42 U. S. C. §1395ww(b)(3)(B)(xi)–(xii) (2006 ed., Supp. The ACA’s $455 billion in Medicare and Medicaid savings offset the $434-billion cost of the Medicaid Expansion. According to the Office of Management and Budget, federal grants to the States for Medicaid amounted to nearly $273 billion in Fiscal Year 2010. Justice Ginsburg claims that in fact this expansion is  no different from the previous changes to Medicaid, such that “a State would be hard put to complain that it lacked fair notice.” Post, at 56. 33–35. Raichis no precedent for what Congress has done here. The results were disastrous. The other reforms Congress enacted, after all, will remain “fully operative as a law,” Champlin, supra, at 234, and will still function in a way “consistent with Congress’ basic objectives in enacting the statute,” Booker, supra, at 259. 18  Although the plaintiffs, in the proceedings below, did not contest the ACA’s satisfaction of these criteria, see 648 F. 3d 1235, 1263 (CA11 2011), The Chief Justice appears to rely heavily on the second crite- rion. For example, the Act requires state programs to provide Medicaid coverage to adults with incomes up to 133 percent of the federal poverty level, whereas many States now cover adults with children only if their income is considerably lower, and do not cover childless adults at all. . IV), 1396u–7(a), (b)(5), 18022(a). When the 110th Congress reached a conclusion about Medicaid funds that differed from its predecessors’ view, it abridged no State’s right to “existing,” or “pre-existing,” funds. 10, No. 26  Federal taxation of a State’s citizens, according to the joint dissenters, may diminish a State’s ability to raise new revenue. In the first, we held that a suit to enjoin collection of the so-called tax was barred by the Anti-Injunction Act. National Federation of Independent Business v. Sebelius. v. Alton R. Co., 295 U. S. 330, 362, 368 (1935) (invalidating compulsory retirement and  pension plan for employees of carriers subject to the Interstate Commerce Act; Court found law related essentially “to the social welfare of the worker, and therefore remote from any regulation of commerce as such”). Congress addressed the insurance problem by ordering everyone to buy insurance. 16 (to “provide for organizing, arming, and disciplining, the Militia”); id., cl. 16–30. It is of course true that the Act describes the payment as a “penalty,” not a “tax.” But while that label is fatal to the application of the Anti-Injunction Act, supra, at 12–13, it does not determine whether the payment may be viewed as an exercise of Congress’s taxing power. Those risks would undermine Congress’ scheme of “shared responsibility.” See 26 U. S. C. §4980I (2006 ed., Supp. It can assuredly do that, by exercising the powers accorded to it under the Constitution. Second, and perhaps most important, the minimum coverage provision, along with other provisions of the ACA, addresses the very sort of interstate problem that made the commerce power essential in our federal system. The minimum-coverage provision is found in 26 U. S. C. §5000A, entitled “Requirement to maintain minimum essential coverage.” (Emphasis added.) See Title IX, Subtitle A—Revenue Offset Provisions, 124 Stat. 26, 2012). This practice of attaching conditions to federal funds   greatly increases federal power. 1 (to “lay and collect Taxes”). . Indeed, this danger is heightened when Congress acts under the Spending Clause, because Congress can use that power to implement federal policy it could not impose directly under its enumerated powers. See CBO, Spending & Enrollment Detail for CBO’s March 2009 Baseline. First, the tax imposed an exceedingly heavy burden—10 percent of a company’s net income—on those who employed children, no matter how small their infraction. Kentucky was therefore obliged to re- turn the money. IV). That, according to the Government, means the mandate can be regarded as establishing a condition—not owning health insurance—that triggers a tax—the required payment to the IRS. The phrase “active in the market” cannot obscure the fact that most of those regulated by the individual mandate are not currently engaged in any commercial activity involving health care, and that fact is fatal to the Government’s effort to “regulate the uninsured as a class.” Id., at 42. That requirement is met in this case. The provision is thus entirely consistent with the Consti- tution’s design. This allows insurers to subsidize the costs of covering the unhealthy individuals the reforms require them to accept. The Chief Justice’s Commerce Clause opinion, and even more so the joint dissenters’ reasoning, see post, at 4–16, bear a disquieting resemblance to those long-overruled decisions. But that does not mean the compelled purchase of the first is properly regarded as a regulation of the second. Even if the individual mandate is “necessary” to the Affordable Care Act’s other reforms, such an expansion of federal power is not a “proper” means for making those reforms effective. (b) Nor can the individual mandate be sustained under the Necessary and Proper Clause as an integral part of the Affordable Care Act’s other reforms. The following plaintiffs joined: The Attorneys General of Arizona, Indiana, Mississippi, Nevada, North Dakota, Alabama, Colorado, Florida, Idaho, Louisiana, Michigan, Nebraska, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Georgia, Alaska, Ohio, Wisconsin, Kansas, Maine, Iowa, and Wyoming; Mary Brown and Kaj Ahlburg; and the National Federation of Independent Business.